Assessing the Sustainability of Ubiquiti Inc's Upcoming Dividend
Ubiquiti Inc (UI, Financial) recently announced a dividend of $0.6 per share, payable on 2024-02-26, with the ex-dividend date set for 2024-02-16. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Ubiquiti Inc's dividend performance and assess its sustainability.
What Does Ubiquiti Inc Do?
Ubiquiti Inc is a wireless and wireline network equipment provider for small Internet service providers and small- and midsize-business integrators. Its product is based on two primary categories namely Service Provider Technology and Enterprise Technology. The company generates maximum revenue from Enterprise Technology. Geographically, it derives a majority of revenue from North America and also has a presence in Europe, the Middle East and Africa; Asia Pacific; and South America.
A Glimpse at Ubiquiti Inc's Dividend History
Ubiquiti Inc has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Ubiquiti Inc's Dividend Yield and Growth
As of today, Ubiquiti Inc currently has a 12-month trailing dividend yield of 1.88% and a 12-month forward dividend yield of 1.88%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, Ubiquiti Inc's annual dividend growth rate was 26.00%. Based on Ubiquiti Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Ubiquiti Inc stock as of today is approximately 1.88%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Ubiquiti Inc's dividend payout ratio is 0.39.
Ubiquiti Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Ubiquiti Inc's profitability 10 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Ubiquiti Inc's growth rank of 10 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Ubiquiti Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Ubiquiti Inc's revenue has increased by approximately 17.90% per year on average, a rate that outperforms approximately 82.69% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Ubiquiti Inc's earnings increased by approximately 5.10% per year on average, a rate that outperforms approximately 37.33% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 19.50%, which outperforms approximately 67.02% of global competitors, speaks to its strong operational efficiency and profitability.
Next Steps
In conclusion, Ubiquiti Inc's upcoming dividend, alongside its historical dividend growth rate, reasonable payout ratio, strong profitability, and solid growth metrics, paint a promising picture for value investors. The company's financial health and market position suggest that it could continue to provide shareholders with reliable and potentially growing dividends. Investors interested in high-dividend yield opportunities may find Ubiquiti Inc an intriguing option to consider in their portfolios. For further analysis and dividend stock opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
